Over the past 10 years, the Australian tech startup sector has exploded to become one of the fastest startup sectors globally. But smart companies need smart people practices – and too often in startups, the people component isn’t given too much attention until it’s too late.

Everyone loves a good Aussiepreneur story. A battler from our own backyard launching a successful start-up. Or the cool eastern suburbs kid taking a brand from Bondi to Beijing.

And, in true Aussiepreneur fashion, those stories are likely to be played out against a backdrop of surfboards rather than ping-pong tables, with five o’clock beers a regular occurrence, and a workplace built on a culture of mateship – with a proud ‘no d*ckheads policy’ at the core.

This image of the laid-back organisation that promotes wellbeing is in stark contrast to the stress and uncertainty when something people related goes awry – which, unfortunately, it will.

HR consultants, or lawyers, are often called in to be the fixers – negotiating resolutions and mediating relationships when things turn sour. And this can be expensive, disruptive and distracting.

Every entrepreneur needs smart people practices in place. No matter how great their mates.

Mistake 1: Sealing the deal with a handshake

It might have worked in the very early days, but employing people on a handshake and forgoing the formal paperwork is a recipe for disaster.

In our complex industrial relations environment, casuals are not clearly defined, contractors may have access to entitlements and National Employment Standards cannot be negotiated. So entrepreneurs need to make sure anyone who they bring into the company are fully aware about what they’re signing up for.

When the excitement of new beginnings is heady, an employment or contractor agreement seems like unnecessary admin or expense. That feeling of invincibility quickly sours when an employee asks "who owns this idea?”, or when someone decides to exit the relationship.

Without clearly defined terms of the relationship, there will be complicated questions that need to be answered – at an often emotionally-charged time.

The solution:

Get clear on the terms of the working relationship – and put it in writing.

Understandings and informal agreements are often made with the best of intentions, at a time when passion is high and the potential for success is electric. Putting agreements in writing encourages entrepreneurs to be realistic about what is possible and what they are willing to promise.

Also, decide where your time and money are best spent – whether this is a technology platform to support mobile working and communication, a talent management plan to contribute to career development for your team or a creative recruitment strategy that takes the pain and risk out of search and selection.

Mistake 2: Relying on your employees’ mind-reading skills

The vision of the entrepreneur can be exciting and intoxicating, and is an asset to be leveraged in attracting, retaining and developing talent.

What it is not; however, is a Jedi-mind-trick that can be transferred to employees via osmosis.

The reality is that it is the employer’s responsibility to make sure everything related to the terms of the working relationship is clear.

So, entrepreneurs need to figure out a way in which to communicate not only their vision for the company, but also their vision for their people.

Regardless of the employment status, individuals who are engaged in a shared vision will understand how their work contributes to the greater purpose.

In order to make that vision a reality, though, you need an infrastructure based on values, policies, role clarity, organisational design, workforce planning and talent management.

And these are the functions that help to set clear expectations around how people show up at work.

The solution:

Share the vision, and invest in your version of onboarding.

At a minimum, onboarding provides the basic employment documents, sets expectations for how people show up at work and clarifies how roles fit into the purpose or vision of the organisation.

Mistake 3: Thinking the gig economy comes without obligations

The gig economy is growing by the day, and with further rapid growth expected, alternative work arrangements will transform the workforce and the nature of working arrangements.

Deloitte Insights predicts that over the longer term, the gig economy will shift to more creative work – and the way that work is done is likely to change, with the focus being on longer-term relationships. Good for consistency and culture, risky if we ignore compliance under current legislative guidelines.

In summary:

HR isn’t there to cramp your style – in fact, it’s the opposite. It should make everything else easier.

Design your people practices to suit your purpose and your culture – make HR in your business something to be proud of, and an asset in itself.

And don’t worry – it’s never too late to fix what might have been the consequences of a quick or lean start. Just make sure you address it now because, without solid people foundations, your people niggles will becoming people pain in the not-too-distant future.